Question 1

What tax rate should Canadian freelancers use?

Accepted Answer

For a freelancer earning C$100-$130K gross, expect a combined effective rate of around 28-33% once federal tax, provincial tax, and both halves of CPP are in. Quebec rates sit higher; Alberta lower. If you're incorporated and paying yourself a salary, run the numbers through your own accountant — this tool assumes sole-proprietor taxation.

Question 2

How many billable hours should I actually assume?

Accepted Answer

Most freelancers overestimate this and undercharge as a result. A typical working year is ~2,000 hours, but after business development, admin, pitching, invoicing, training, and deep-work planning, genuinely billable time is usually 60-70% of that — 1,200 to 1,400 hours. If you're running a solo consultancy with lots of sales motion, it can drop to 50%. The tool starts from a realistic figure because that's where the rate that actually pays the bills comes from.

Question 3

Do I include private health coverage?

Accepted Answer

Most Canadians are covered provincially for core care, but dental, vision, prescriptions, and extended benefits usually aren't. If you're replacing an employer plan out of pocket, include the annual premium (typically C$1,500-$4,000 for a family) in the expenses field.

Question 4

Why is this lower than what agencies charge?

Accepted Answer

Agencies typically mark up 2-3x on top of the freelancer's rate to cover account management, sales, bench time between projects, office overhead, insurance, and margin. Your rate as an independent contractor is the rate the agency would pay a freelancer — not the rate they bill the client. If you're comparing, knock 50-70% off the agency day rate to get the solo-freelance equivalent.

Question 5

What's the difference between the floor rate and the target rate?

Accepted Answer

The floor rate is the break-even number — charge below this and you're subsidising your clients. The target rate is what you should actually pitch: floor plus a buffer (default 20%) for slow months, unexpected expenses, and retirement savings. If you always quote your floor, you're one bad quarter away from a cash-flow problem. Quote the target rate and negotiate down from there if needed — not up.

Question 6

Is this tool free to use?

Accepted Answer

Yes — completely free, no sign-up, no account. TimeIsMoney.tools is supported by minimal, non-intrusive advertising. Nothing you enter leaves your browser.

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